SUBMITTED TO:-

PROF. WASEEM UR REHMAN

SUBMITTED BY:-
NAME ROLL NO.
ANNS AHMAD BB17158
HASSAM ARIF BB17117

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Table of Contents
INRODUCTION
……………………………………………………………………………………………….4

CASE STUDY ………………………………………………………………………………………………

5

SWOT ANALYSIS………………………………………………………………………...5

PORTER’S GENERIC
MODEL…………………………………………………………………………………….7

PORTFOLIO ANALYSIS………………………………………………………………….8

PRODUCT/MARKET EXPANSION
GRID………………………………………………………………………………………11

MARKETING STRATEGY………………………………………………………………12

TOWS MATRIX………………………………………………………………………….13

SPACE MATRIX…………………………………………………………………………14

COMPETITOR PROFILE MATRIX……………………………………………………..16

QSPM……………………………………………………………………………………...21

RECOMMENDATIONS……………………………………………………………….…22

CONCLUSION…………………………………………………………………………….22

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INTRODUCTION
Levis Strauss &CO. is one of the most famous and world’s largest apparel manufacturer brand. It
was founded by Mr. Levi Strauss in 1853. This brand is dong business in 110 countries, in more
than 55000 retail locations worldwide. They manufacture the jeans in 108 different sizes and 20
different fabrics. There are 3 brand portfolios of Levis which are as follows
 Levis®,
 Levis Strauss
 Denizen

MISSION STATEMENT
“To sustain responsible, commercial success as a
global marketing company of branded apparel.”

VISION STATEMENT
 “We are the embodiment of the energy and events
of our times, inspiring people with a pioneering spirit.”

CASE STUDY

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STRATEGIC MANAGEMENT
It is an art and science of formulating
implementing evaluating the cross functional decision which helps organizations to achieve its
long term objectives, which means it focuses on the integrating management marketing finance
accounting operation and information management to achieve organizational success.

Introduction
Companies use many tools and strategies to analyze their current position and
formulate strategies for future directions they should take. With high level of dynamism than
characterizes the current day business environment, companies need to be aware of their internal
capabilities and utilize them to acquire opportunities and to deal with their external threats. For
this companies do strategic audit.
Strategic audit is a process of gathering important information about
internal and external factors. Internal factors include management, marketing, finance,
production and all other aspects of companies. While, external factors include macro
environment such as socio-cultural, demographics, environmental, economic, political and
technological forces.
For this companies use
the different models to make strategies for their future. These strategies include Porter’s Generic
model, Swot analysis and BCG matrix.

SWOT ANALYSIS
SWOT analysis in turn summarizes the main elements of the
strategic audit into the statement of the company’s strengths, weakness, opportunities and
threats. A SWOT analysis also helps the management to identify what organizational activities
can be realistically achieved over the course of time.
Strengths and weakness are the internal elements of the
organization, while on opportunities and threats on which company has no control.
Strengths Weaknesses

1. Popular and strong brand name 1. The company focuses too much on brand
protection
2. Expertise and experience in the denim
Industry 2. Limited business growth due to increase in

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 competition from other denim companies
3. Focus on things other than profits-
captioned ‘profits through principles’ for 3. Complacency in coming up with innovative
examples, donations and scholarships designs for customers

4. Levi Strauss company has a visionary CEO 4. Delays in trends such as colored jeans for
in Chip Bergh women and more tailored jeans for men

  5. With 16200 employees, the company incurs

high expenses in paying wages.

Opportunities
Threats
1. The casual wear market is growing fast
1. Fast changing consumer tastes
2. Internationalization into emerging markets
2. Increasing Competition from low end
characterized by low cost manufacturing and
substitutes such as Lee and Wrangler hence
production
lower market share
3. High tech re-invention that is the use of
4. Very close competition for market share with
technology to create a tech-advanced
rivals targeting the same high-end customer
women’s denim that fit depending on body
base
shape.

STRENGTHS
As we know it is one oldest denim brand due to which levis draw one of the
strengths have popular brand name in the denim industry with a lot of expertise and experience.
Also this company focuses on those things which are related to smooth flow of business than
only on profits and fast growth of retail shop. Due to these strengths company has enabled to
survive the survive the competition with ZARA and H&M.

WEAKNESS
The major weakness of company was noted is satisfaction of it’s design team in coming up
with unique products. These weaknesses can make the company susceptible to the competition
from the rivals that are keen to provide best design and that are enough to match the changing
trends.

As it is stated by the CEO of LEVI’S “At Levi, designers sit in the company’s archives and
look at old Western shirts and jeans…We have one of the greatest brands in the world, but I
think that there may have been periods where we thought the brand itself could carry us through
thick and thin, there is no question that we got complacent”

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OPPORTUNITIES
As the opportunity is identified in SWOT analysis, company is anticipate
for better performance in the future, especially if it utilize its strengths for beneficial use. The
opportunities for Levis are increase in demand for casual wear, expansion to new markets and
the technological evolution in fashion industry. It can greatly increase the production and
marketing efficiency of the company. In order to avail this opportunity company must motivate
its employees to commence on designing the competitive products. Failure in this can make a
company to lose its potential customers and the rival companies will avail this opportunity.

THREATS
The main threat for the company that there are many competitors exist in this
industry. This has to be overcome by using the Porter’s Generic Strategy model which we are
going to discuss.

PORTER’S GENERIC MODEL

Michael Porter suggest 3 broad generic strategies that can be used by a company to outclass its
competitors. These strategies include segmentation, differentiation and cost leadership strategies.
From the analysis of levis case study the porter’s strategies are clearly exhibited.
Segmentation strategy
Narrow
Market 1.   Older disaffected shoppers – “fans who love us but quite frankly left us”
Scope
2.   The lost generation – “fans who don’t really know who we are”

Differentiation strategy

1.    Classic pieces of clothing such as button fly Cost leadership

 
and trucker jacket that are the seam for the giant
business of denim 1. Reduction of inflated cost
 
2.    Return the brand to its roots while moving structure by the new Levi
  CEO
forward
Broad 2. Progressive growth in
3.    Innovation- Levi Strauss is using high-tech by
Market sales volumes for successive
involving a team of 30 people on its Eureka lab to
Scope years.
work on 30 prototypes a week. The company
encourages the conversion of ideas into design in
less than 24 hours

  Uniqueness Competency Low Cost Competency

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COST LEADERSHIP
According to this model companies use this strategy to set the
prices low to their rival company’s products. From the analysis of case study this strategy is
implemented by the Chip Bergh. He cuts the costs and prices of the products that are high for its
customers. The new prices of jeans are low but close to those rival companies who design the
jeans like levis for price sensitive customers.

DIFFERENTIATION
Companies use different strategies to differentiate themselves by
creating new designs, technological evolution and changes in brand images. Levis used all the
techniques to achieve uniqueness in this industry. The company introduces new designs that will
attract customers and create brand loyalty in them.

SEGMENTATION
In this strategy company seek to meet the needs and desires of its
targeted market, for example which product, place of outlets and which class of customers
company want to target. Levis target the rebellious shoppers who left the brand for brands that
matched to them and to those customers who don’t know anything. By clearing about its
consumer segments, company is able to design those products that the customer wants.

PORTFOLIO ANALYSIS
Portfolio Analysis helps the managers to identify the most profitable and least profitable
business. So that they can easily decide in which business they put maximum resources and to
which business they phase down. The first step for this analysis is to identify the SBU’s.
SBU is a unit of company that has
separate mission and objectives and can be planned from other companies business
independently.
It evaluates on two important dimensions
 The attractiveness of SBU market or industry.
 The strength of SBU position in the market.
The most famous method is BCG Matrix

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BCG MATRIX

The Boston consulting group growth-share matrix is a planning tool that uses the graphic
representation of a company’s products and services in an effort to help company what should it
keep sell or more invest in.
As we see in the fig. There are 4 types of SBU’s in this matrix which we
are going to discuss briefly.

STARS
Stars have high growth and high market share. They often need heavy investment for
their rapid growth. Eventually their growth will turn down and they will turn into cash-cow.

CASH-COW
Cash-cow have low market growth but have high market share. They need
less investment to hold their market share. Thus they produce the cash which company uses to
finance other SBU’s that need investment.

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QUESTION MARKS
They have low market share business units in those markets
where growth rate is high. They require cash to hold in it, let alone increase it. For this
management has to think hard, which ones that they convert in stars and to which they have to
phase out.

DOGS
They have low market share and low market growth. They generate enough cash to
hold them in market but not promise to generate large source of cash.

When applying BCG Matrix, a company has to identify the various SBU’s are making up the
company. Assesses the attractiveness and decide how much support each of them required. After
classifying the SBU’s according to this approach, it requires to determine what roles these units
play in the future.

ALTERNATIVE STRATEGIES
From here companies has 4 alternative strategies
which are as follows

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 Investment in business unit to build its market share.
 Investment in unit to just hold on its market share.
Divest the SBU by selling it.
 Harvest the short term cash-flows
 of the unit regardless of long-term effect.

This is what Levis exactly did with business diversification it had introduced earlier on. Levis
went straight back to what it had always done while making and selling jeans. With the
investment of38 million dollars in the new-classic 501 blues advertising campaign, turned out to
be a very profitable move for them. Developing on the solid base the company continued to
enumerate the products, which had even comprehensive appeal than their hope.

PRODUCT/MARKET EXPANSION GRID

In addition to adding new products, Levi’s also stepped up its efforts to
develop new markets. This was partly thanks to help of the product/market expansion grid,
which is a useful device for identifying growth opportunities.
As you can see the grid shows four routes to growth I.e market development, product
development, market penetration and diversification.

MARKET DEVELOPMENT
In addition to developing new products, LEVI’S also
developed new markets. Thus in1991, it created jeans designed especially for women and
launched in innovative 12 million$ “JEANS FOR WOMEN” advertising campaign in order to
promote them.

PRODUCT DEVELOPMENT
Then in 1985 LEVI’S went for product development. This
proved quite successful as the blue 501 jeans got established in the market. Finding that
successful, company continued with it. In late 1986 following the enormous success of blue 501
jeans, LEVI’S introduced DOCKERS- the casual and comfortable trousers targeted at aging
baby boomers. In the few years since its introduction DOCKERS had become a 6 billion a-year
success.

MARKET PENETRATION
LEVI’S most dramatic turnaround has been in international
market. After selling its stumbling and unprofitable foreign operations in 1985, the company has

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developed what a patchwork of license into a well-coordinated team of world subsidiaries.
Guided by the strategy “TO THINK GLOBALLY, ACT LOCALLY”, the company turned the
Dockers line into a worldwide best seller.
However, within this global strategy, LEVI’S encourages local unit to tailor the products and
programs to their own markets. This is how Feminine line in Brazil was developed.

DIVERSIFICATION
Before 1984, it was proved unsuccessful due to its stretched into too many
areas and this led to a decrease in quality.

MARKETING STRATEGY
It provide the marketing logic by which the business
unit is to achieve its marketing objectives

Consumer Targeting
It is at the center of marketing strategy. Consumer targeting requires
the company to.
 Identify the total market
 Divide it to smaller segments
 Select the most promising one
 Design strategies for profitably serving them better than its competitors.
This process is described in following 5 steps

Demand Measurement and forecasting

It involves estimating market size and all the
possibilities for future market growth, as well as identifying all the products of competitors.

MARKET SEGMENTATION
It involves determining which segment offers the best
opportunities to the company to achieve its objectives.

MARKET TARGETING
It involves evaluating the attractiveness of each market segment and
selecting one or more segment to enter.

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MARKET POSITIONING
It provides the product a clear, distinctive and desirable place in the
mid of target customers compared with competing products.

COMPETITIVE POSITIONING
To position a product completely company must offer
greater value, either by charging low prices or by offering more benefits to justify higher prices.

The clever marketing positioning abroad and innovative global marketing efforts have produced
stunning results for LEVI’S. As the domestic market shrank, foreign sales accounted for most of
LEVI’S growth.
Dramatic strategies and market planning actions also transformed LEVI’S into a vigorous and
profitable company, one better matched to its changing opportunities.
By building a strong base in its core jeans business, coupled with well-planned products and
market development. LEVI’S have found ways to grow profitably despite in decline in domestic
jeans market.

TOWS MATRIX
In early 1853 Levis develop a strategy that resulted in a excellent market position of accompany
in 2003. The external threat and opportunities pertain mostly to the situation of Levis in Pakistan
are as follows

Strengths
1. Brand name.
2. Access to target market with 300 stores in whole country.
3. Finance and access to international capital
4. Distribution channels and global sourcing.

Weakness
1. High cost of Brand protection
2. Lack of control over quality
3. Lack of control over distribution
4. Distribution conflicts.

Opportunities
1. Largest brand name apparel marketers with sale in more than 110 countries.
2. Technological development
3. High Prodution and co-ordination activities.

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 4. New market on website shipping
5. Develop new product

Threats
1. Possible recession and people likely to spend on trend items.
2. Economic downturn.
3. Price issue with competitors
4. Increasing number of competitors.

After SWOT analysis of levis in Pakistan now we are going to discuss the Strngth versus Threats
, Strength versus Opportunities, Weakness versus Opportunities and Weakness versus Threats
strategies.

Strengths versus Opportunities Strategies

1. Increase sales and supply to different cities. S1, O1
2. Technological Development
3. Higher production
4. New product development in all over the Pakistan S2, O2, O3

Weakness versus Opportunities

1. High cost of Production in markets W1, O1
2. Lack of control in technological development production and distribution (comparison of
W2, W3, O4)
3. Resolve distribution conflicts ( comparison of W4, O3,O4)

Strengths versus Threats

1. Meet competitors and advance design of the market. ( comparison of S1, S2, T2)
2. Economic downturn and finance are the prime issues ( comparison of S3, T1, T3)
3. Increase in globalization which increases competitors ( comparison of S4,T4, T5)

Weakness versus Threat

Reduce threats of competition by developing flexible product line.

SPACE MATRIX
The strategic position and action evaluation matrix is a key tool that focuses on the strategy formulation
especially about the competitive position of the company. It can be used for the basis of other analyses
such as SWOT, BCG matrix or many others.

The space matrix is consists of 4 quadrants and each quadrant requires different kind of strategies. These
quadrants are as follows

 Aggressive

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  Conservative
 Defensive
 Competitive

The space matrix explains that our company should pursue aggressive strategy. Levis has strong
competitive position in the market with rapid growth rate. It needs to use its internal strengths to establish
market penetration and market development strategy.

The space matrix works on 2 internal and 2 external dimensions to evaluate its strategic position in the
industry which are as follows

 Financial Strength
 Competitive Advantage Internal Strategic Dimensions
 Environmental Stability
 Industry strength External Strategic Dimensions
There are many factors include in internal strategic dimensions which are turnover, return on investment,
leverage, liquidity, cash flow, working capital and others.

External strategic dimension factors include economic condition, GDP growth, technology, barriers to
entry, inflation, price elasticity and others. These factors can be analyzed by using Micheal porter’s five
forces model.

Steps for Developing SPACE MATRIX

1. Choose a setoff variable for financial strength, competitive advantage, environmental stability
and industry strength.
2. Give them a numerical value starting from +1 (worst) to +6 (best) to each of the dimensions that
make up FS and IS dimensions and similarly give numerical value starting from -1 (best) to -6
(worst) that make up ES and CA.
3. Calculate the average value of each dimension by adding the value given to the variable of each
dimension and dividing them with number of variables in the respective dimension.
4. Plot the average scores of every dimension on the appropriate axis.
5. Add the scores of two dimensions and plot the resultant point on x-axis. Similarly plot the
resultant on y-axis. Then plot intersection point on xy.
6. Draw a directional vector starting from origin to new intersection point. This vector reveals the
type of strategies recommended for the organization.

If the directional vector located in aggressive quadrant (upper right quadrant) it reveals that company is in
excellent condition to use its internal strengths to take advantage of external opportunities, overcome
internal weakness and avoid external threats. That results in market penetration, market development,
product development, integration strategies, and diversification strategies.

Space Matrix is helpful in determining best strategy for a company. But in case there are more than one
strategy then companies must go for CPM of QSPM matrices

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Competitors Profile Matrix
CPM Is a technique that compares firms and its competitors and reveals their relative strength and
weaknesses.

The matrix identifies the company’s strengths and weaknesses over its competitors, which helps them to
understand that which areas companies must improves and which companies must protect. Therefore
firms use CPM with the help of critical success factors in a market.

Critical Success Factors

Critical success factors are the prime factors that determine the company’s strengths and weakness over
competitors by comparing them with its competitors. These factors vary from industry to industry,
strategic groups or with internal or external environment factors. These factors are as follows

Market Share Union relations Power over suppliers

Product Quality Skilled workforce Access to key suppliers

Clear strategic direction Location of facilities Efficient supply chain

Customer service Production capacity Supply chain integration

Customer loyalty Added product features On time delivery

Brand reputation Price competitiveness Strong online presence

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 Effective social media
Customer satisfaction Low cost structure
management

Experience and skills

Financial position Variety of products
in e-commerce

Management qualification
Cash reserves Complementary products
and experience

Innovation in products and

Profit margin Level of product integration
services

Inventory turnover Successful product promotions Innovative culture

Employee retention Superior marketing capabilities Efficient production

Income per employee Superior advertising capabilities Lean production system

Innovations per employee Superior IT capabilities Strong supplier network

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 Cost per employee Size of advertising budget Strong distribution network

R&D spending Effectiveness of sales distribution Product design

Strong patent portfolio Employee satisfaction Level of vertical integration

Effective corporate social

New patents per year Effective planning and budgeting
responsibility programs

Revenue per new product Variety of distribution channels Sales per outlet

Successful new introductions Power over distributors Parent company support

How to use this technique

Step 1 Identify the key success factors
Identify the key success factors of the company according to its industry. In addition following questions
will be helpful for finding critical success factors of company

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  Why consumers prefer Company A over Company B or vice versa?
 What resources, capabilities and competences firms possess?
 What sustainable competitive advantages companies have in the industry?
 Why some companies succeed and others fail in the industry?

Step 2 Give weights and ratings

The best way to identify what weights should be assigned to each factor is to compare the best and worst
performing companies in the industry. Well performing companies will usually undertake activities that
are significant for success in the industry.  Weights can also be determined in discussion with other top-
level managers. Ratings should be assigned using benchmarking or during team discussions. 

Step 3 Compare the score and Take actions

You should compare the scores on each factor to identify where company’s relative strengths and
weaknesses are.

CPM of Levis (comparing with Engine, Outfiiters)

CPM Table

Outfiiters Levis Engine

Critical Success Factor Weigh Rating Score Rating Scor Rating Score
t e

Brand reputation 0.13 2 0.26 3 0.39 1 0.13

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 Range of products 0.05 3 0.15 1 0.05 2 0.10

Successful new 0.04 3 0.12 3 0.12 3 0.12

introductions

Market Share 0.14 2 0.28 4 0.56 4 0.56

Sales per employee 0.08 1 0.08 2 0.16 3 0.24

Low cost structure 0.05 1 0.05 3 0.15 4 0.20

Variety of distribution 0.07 4 0.28 2 0.14 2 0.14

channels

Customer retention 0.02 2 0.04 4 0.08 1 0.02

Superior IT capabilities 0.11 3 0.33 4 0.44 4 0.44

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 Strong online presence 0.15 3 0.45 3 0.45 4 0.60

Successful promotions 0.08 1 0.08 2 0.16 1 0.08

Total 1.00 - 2.44 - 2.94 - 2.71

Hence this table shows that the levis is the strongest performer among them. As this table shows that
strengths for levis are brand reputation, innovations, new product development, market share, customer
loyalty, technological capabilities and promotional strategies.

While on the other hand the levis needs to put efforts in to improve its distribution channel, reduce cost of
production and put efforts to improve their online selling system.

QSPM
Quantitative strategic planning matrix (QSPM) is a high level strategic management approach for
assessing possible strategies. QSPM provides an analytical method for relating reasonable alternative
actions. The QSPM strategy falls within so called stages 3 of strategy formulation analytical
framework.

Matrices for QSPM

There are 2 matrices for QSPM which are as follows

 IFE Matrix
 EFE Matrix

Internal factor evaluation (IFE) Matrix

It is a strategy tool use to analyze firm's internal environment and to uncover its strength as well as
weaknesses.

External factor evaluation (EFE) Matrix

It is a strategy tool used to determine company's external environment and to recognize the available
opportunities and risks.

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To calculate QSPM of the company we use these matrices.

Why Go for QSPM?

QSPM approach strives to objectively choose the best strategy using input from other management
techniques and some easy enumerations. The QSPM method uses input from stage 1 analysis,
matches them with results of stage 2 analyses and then elect objectively among alternative strategies.

How to Form QSPM

1. The overall strategic management analysis is used to specify key strategic factors. This
can be accomplished using EFE and IFE matrix.
2. Formulation of the type of the strategy we would like to continue. This can be done
using SWOT analysis, SPACE matrix analysis, BCG matrix model or IE matrix model.
3. Each key external and internal factor should have some value in the overall strategy.
These weigh from the IFE and EFE matrices.
4. Attractiveness score (AS) how each factor is crucial or attractive than alternative strategy.
Attractiveness score is determined by observing each external and internal factor
separately (0,1,2,3,4)
5. Total attractiveness score are interpreted as the product of multiplying the weights from
(step 3) by the attractiveness score (step 4) in each row.
6. Calculate the sum total attractiveness score by adding all total attractiveness scores in
each strategy column of QSPM.

RECOMMENDATION
It is recommended that Levis must opt one of the two strategies of this model, which is
diversification through creation of more creation of designs of products that resemble the wider
demographic extent of customers. It will lead to higher earnings.
It is also recommended that the company should focus
on the frequently changing needs of consumers in the denim market and ensure that its
operations and designs are flexible enough to match with these changing trends. Taking
advantage of technological milestones in the fashion industry also recommended. This will
ensure the production of unique yet trendy designs.

CONCLUSION
From the analysis above by the use of different strategies it has been identified that whilst the
company may have some weaknesses, it also possesses several capabilities if well utilized, will
strengthen its brand position in the denim apparel industry.

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